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Washington Healthcare Update - March 21, 2016

At a markup on March 15, the House Energy and Commerce Committee approved $30 billion in cuts to health programs, despite claims from Democrats that the GOP proposal was another attempt to undermine the Affordable Care Act (ACA) and move costs to states.

The Common Sense Savings Act of 2016 ( H.R. 4725) — approved 28-19 — reduces federal funding for the Children’s Health Insurance Program (CHIP), limits a state’s ability to tax Medicaid providers from the current 6 percent to 5.5 percent, cuts Medicaid funding for prison inmates, ensures that jackpot winners are not eligible for Medicaid and repeals the Affordable Care Act’s (ACA) Prevention and Public Health Fund.

Democrats offered several amendments, but all were rejected. Among these were amendments to ensure that lead poisoning screening and prevention programs would not be hurt by the cuts, one repealing language to lower the Medicaid provider tax threshold to 5.5 percent and one to keep the prevention fund unless all state and local health officials are prepared for the Zika virus.

House Budget Committee Passes Budget Resolution for FY 2017

House Republicans unveiled a sweeping budget on March 15 that would eliminate federal deficits within 10 years and cut spending by $6.5 trillion.

Democrats immediately attacked it because it would slash social safety net programs and hardline conservative Republicans said the budget did not cut enough. Despite that, the Budget Committee voted along party lines to send the budget for consideration by the House on March 16.

Conservative opposition is based on the budget’s $1.07 trillion in discretionary spending for fiscal 2017, which most Republicans opposed. However, the budget resembles past Republican budgets in many respects: It increases defense spending and doesn’t raise taxes. It converts Medicaid into a block grant program, repeals the Affordable Care Act and reduces Medicare spending. It also eliminates part of the Dodd-Frank financial regulation law.

The budget also makes deep cuts to nondefense discretionary programs. The proposal would reduce federal noninterest spending — that is, federal spending on everything other than interest on the debt — to less than 17 percent of GDP by 2024, according to an analysis by the Congressional Budget Office. Under current law, noninterest federal spending is projected to be 19.5 percent of GDP in 2024.

The budget includes reconciliation instructions that could be used if the Senate also adopts a budget. Outside of reconciliation, the budget also calls for $30 billion in mandatory savings over the next two years and at least $140 billion in savings over 10 years, and it requests that the following committees find those savings: Agriculture, Energy and Commerce, Financial Services, Judiciary and Ways and Means.

A quick look at some of the main proposals:

Defense

The budget provides $551 billion in base defense funding for fiscal 2017, as agreed to in the bipartisan budget deal. It also provides $74 billion in so-called Overseas Contingency Operations funding.

While President Barack Obama’s budget request increased defense spending over sequester levels by $178 billion over the next decade, the House budget goes further, increasing defense spending by $267 billion over sequester caps over the next decade.

The budget calls for maintaining the prison at Guantánamo Bay, Cuba.

Entitlements

The budget would create a new private Medicare program to compete with Medicare starting in 2024; the traditional Medicare program would remain an option.

The budget would increase means-testing for Medicare recipients with high incomes.

Medicaid would be transitioned into a block grant, or “State Flexibility Fund,” that gives states more freedom to operate the program.

The budget would include a work requirement for able-bodied adults who are enrolled in Medicaid.

The budget would repeal all of Obamacare.

On Social Security, the budget would alter a current-law trigger that requires the president to submit a plan for restoring balance to the Social Security trust fund. Congressional leaders would also be required to propose solutions for Social Security.

Taxes

The budget calls for “lowering of rates and a consolidation of tax brackets,” but does not go into specifics.

The alternative minimum tax would be repealed.

The budget calls for a transition away from a worldwide tax system as a way to “make U.S. companies more competitive in the global marketplace.”

Energy

EPA funding would be reduced and “unobligated balances from stimulus green energy programs” would be rescinded.

Infrastructure

The responsibility for infrastructure spending would be largely shifted to the states.

Operating subsidies for Amtrak would be eliminated, which would likely shutter all Amtrak lines other than the Northeast Corridor.

The TIGER grant program would also be eliminated, as would “New Starts transit grants,” which the budget proposal says fund projects “that are largely of local, not national, benefit” and bias “local transportation investment decisions toward building costly new rail projects.”

Financial services

Provisions of the Dodd-Frank financial regulations would be repealed, including the FDIC’s authority to assist “systemically significant” institutions.

The Consumer Financial Protection Bureau would be abolished.

Fannie Mae and Freddie Mac would be privatized.

Education

The budget would slow the growth of the Pell Grant program for college students.

Welfare and nutrition

Administration TANF waivers would be rescinded.

The food stamp program would be converted into a “State Flexibility Fund,” or block grant.

The Economic Development Administration would be eliminated.

Budget reform

The House will consider an amendment to the Constitution requiring a balanced federal budget.

The budget calls for a complete overhaul of the Congressional Budget Act of 1974 to “reinforce a healthy balance of power between the different branches of government, so Congress restores its power of the purse and improves its oversight of the Executive Branch’s activities.”

The budget calls for adopting “fair-value accounting practices” to more accurately reflect the costs and benefits of the government’s federal direct loans and loan guarantee programs for mortgages, student loans, agriculture and more.

The budget recommends rules relating to unauthorized appropriations should be reviewed and reformed.

Senate Republicans have said they see no need for a budget resolution this year since the agreement passed last year was a two-year agreement.

On March 16, the House Ways and Means Committee voted to pass three pieces of legislation to cut spending, part of a move by GOP leaders to demonstrate to conservatives that they are serious about deficit reduction and in the hopes that the conservatives would fall into line and support the leadership budget that was rolled out this week. The legislation passed by Ways and Means would save $16.5 billion over two years and a total of $98 billion over 10 years. The “savers” package passed out of the committee includes:

Education and Workforce Committee Grills Burwell on Reinsurance Program

On March 15, the House Education and Workforce Committee held a hearing entitled “Examining the Policies and Priorities of the U.S. Department of Health and Human Services.” Republicans on the committee grilled U.S. Health and Human Services Department (HHS) Secretary Sylvia Mathews Burwell on the Affordable Care Act’s (ACA) reinsurance program. The program was designed to help insurers offset the costs of covering sicker enrollees in the first three years. However, it has come under scrutiny by Republicans who believe the administration is illegally diverting money from the U.S. Treasury to insurers.

Funding for the program comes from fees placed on all insurers, including self-funded employer plans, and CMS is required to give $5 billion to the Treasury. However, CMS said in a rule that if collections fell short, the agency would prioritize funding for the insurers over the Treasury. Rep. Bradley Byrne (R-AL) argued that putting out a rule and giving stakeholders a chance to comment does not mean CMS did not violate the law. He quoted a CRS report that said HHS’s interpretation of the law was “in conflict with the plain wording of Section 1341(b)(4).” Burwell responded, “We have articulated why we believe our reading of the law is correct.”

Energy and Commerce Committee Holds Hearing on MACRA and SGR Repeal

On March 17, the Energy and Commerce Committee held a hearing examining the implementation of Medicare payment reforms. Lawmakers asked CMS Deputy Administrator for Innovation and Quality Patrick Conway questions about the agency’s upcoming proposed rule on the Medicare Access and Chip Reauthorization Act of 2015 (MACRA). The hearing focused on the repeal of the Sustainable Growth Rate (SGR) formula — a payment system for doctors that required Congress to implement temporary fixes for over a decade. Committee members had the opportunity to check in with CMS about how the process is going.

Members asked Conway for more information on how CMS will define the amount of risk a doctor must take to be counted under the eligible APM track that qualifies them for a payment increase. There were also questions raised about when the performance period for new payments will begin — Conway implied that the period will begin as soon as 2017. He also said that CNS will simplify some reporting programs currently required of providers.

Appropriations Committee Will Not Cut NIH Funding

On March 16, Rep. Tom Cole (R-OK) said the House Appropriations Committee will not cut $1 billion in discretionary spending from the National Institutes of Health (NIH). This cut was requested in the White House budget proposal.

Cole said the White House proposal to make the cut in discretionary funding and offset it with $1.8 billion in new mandatory spending is discouraging because NIH resources should be increased through the annual discretionary appropriations process.

House Appropriations Chairman Hal Rogers (R-KY) supports increased NIH funding, while agreeing that it should not come from mandatory funding. Ranking member Nita Lowey (D-NY) said Democrats want to double the NIH budget in coming years.

NIH Director Francis Collins welcomed the support of the committee, and stressed that a $1 billion cut would have severe consequences on initiatives on cancer, diabetes and Alzheimer’s.

The Appropriations Committee will start the appropriations process next week, with the Military Construction-Veterans Affairs Appropriations Subcommittee scheduling its markup for March 23.

Upcoming House Hearings

Oversight Committee will hold a hearing on heroin and opioid abuse on March 22.

House Appropriations subcommittee will hold a hearing on the CDC budget on March 23.

Senate

Senate Finance Committee Holds Hearing on ACA and HealthCare.gov

On March 17, the Senate Finance Committee held a hearing entitled “HealthCare.gov: A Review of Operations and Enrollment.” At the hearing, senators questioned officials from the U.S. Department of Health and Human Services (HHS) and the Government Accountability Office (GAO), asking how HealthCare.gov and the Affordable Care Act (ACA) in general can improve.

Members of the committee used new data from a new GAO report to raise concerns about remaining ACA co-ops. The report found that more than 500,000 Americans received coverage through co-ops that have since shut down. Also, four of the 11 co-ops still in operation had not hit enrollment of at least 25,000 members. Most of the co-ops are still in financial turmoil. In commenting on the report, HHS stated its commitment to co-op beneficiaries and taxpayers and provided technical comments.

Senate Committee on Aging Holds Hearing on Drug Price Increases

On March 17, the Senate Special Committee on Aging held a hearing on drug price hikes. Members of the committee grilled Turing interim CEO Ronald Tilles and Turing co-founder Michael Smith about that company’s infamous drug price hike last year. Former CEO Martin Shkreli, who came under federal indictment in December, was not there. Senators focused on the toxoplasmosis drug Daraprim — the hearing featured testimony from a couple who struggled last year to get access to Daraprim for their infant. Tilles said the company is investing in better treatments for the disease and had cut the price in half to some hospitals after its initial 5,000 percent increase. He would not commit to lowering the price further, however.

300 Groups Write Letter to House and Senate Leadership on CMS Part B Drug Model

Over 300 drug companies and doctor and consumer groups wrote a letter to leaders in the House and Senate to express concern with the Centers for Medicare and Medicaid Services’ (CMS) proposed rule to implement a new “Medicare Part B Payment Model.” The groups asked that the House and Senate permanently withdraw the Innovation Center experiment to overhaul payments for Part B drugs. “There is no evidence indicating that the payment changes contemplated by the model will improve quality of care, and may adversely impact those patients that lose access to their most appropriate treatments,” according to the letter sent on March 17. The groups argued the initiative will affect patients with conditions such as cancer, macular degeneration, hypertension, rheumatoid arthritis, Crohn’s disease and ulcerative colitis, and primary immunodeficiency diseases. The letter was signed by 316 groups including PhRMA, BIO, cancer providers, disease groups and others.

On March 17, Senators Lamar Alexander (R-TN) and Senator Patty Murray (D-WA), leaders of the Senate Health Education Labor and Pensions Committee, introduced legislation to help the Food and Drug Administration (FDA) and the National Institutes of Health (NIH) “attract top talent during this exciting time in science.” The FDA and NIH Workforce Authorities Modernization Act will also authorize the agencies to streamline coordination and cut red tape.

The committee plans to debate and vote on the legislation during the committee’s markup on April 6.

On March 16, the Senate Health, Education, Labor and Pension Committee approved a package of bipartisan mental health and opioid abuse bills that address access to care, early intervention and the behavioral workforce shortage, but leave out earlier proposed changes to Medicaid reimbursements.

The committee unanimously approved the measures, including a manager’s amendment to the Mental Health Reform Act of 2016 sponsored by Chairman Lamar Alexander, ranking member Sen. Patty Murray and Sens. Chris Murphy and Bill Cassidy. The committee also adopted an amendment sponsored by Sen. Elizabeth Warren that strengthens enforcement of the mental health parity law.

Alexander said the full Senate would likely consider mental health in April. However, several contentious issues will be raised on the floor of the Senate, including funding and a gun-related amendment, and could complicate the bipartisan effort in the Senate.

The HELP legislation includes a measure to increase the number of substance abuse patients that doctors can treat with buprenorphine — itself an opioid that is used to treat addiction — from 30 to 100, and even more under certain circumstances. It encourages broader use of the overdose remedy naloxone, and better state enforcement of the “plan of safe care” for children who are born dependent on opioids.

Before the legislation goes to the floor, the Finance and Judiciary Committees may offer amendments that deal with issues outside HELP’s jurisdiction. One would likely repeal the IMD exclusion — a decades-old law that prohibits Medicaid reimbursements for mental health patients at hospitals with more than 16 psychiatric beds. Alexander said it has bipartisan support, but it could face opposition as it is estimated to cost in the tens of billions of dollars. It is also unclear what funding will be used to pay for the proposal.

Administration

Executive Director for Cancer Moon Shot Task Force Announced

Vice President Joe Biden appointed Greg Simon, a former pharma executive, Clinton administration official and Hill staffer, as executive director of the cancer moon shot task force today. A recent cancer patient, Simon was most recently CEO of Poliwogg, a financial services company focused on life science investment. He was a vice president for patient engagement at Pfizer from 2009 to 2012.

On March 16, the U.S. Department of Health and Human Services (HHS) named a slate of health care professionals from top providers and tech firms to its Health Care Industry Cybersecurity Task Force. The nomination period, which lasted nine days, ended on March 10 as mandated by Section 405 of the Cybersecurity Act of 2015. This aggressive timeline came in response to the rapid increase in cyberattacks and intrusions targeting insurers, hospitals, devices and many other parts of the health industry.

The task force will schedule four in-person meetings and also work through teleconferences until March 2017, when it is expected to report its findings and recommendations.

Members are from different parts of the industry, and include executives from Philips, Symantec, Anthem, Sutter Health and more.

HHS Cyber Grant Project Will Provide Initial Results This Month

Harris County Hospital District could produce results on the effort to increase sharing of cyber-threat data in the health care and public health sector by the end of March, according to HHS. Last fall, HHS awarded a one-year, $150,000 planning grant to the district — located in Houston, Texas — with the aim of identifying the cybersecurity information needs and gaps of hospitals and other health care organizations across the country.

The grant notice called for the recipient to submit a cybersecurity threat information gap analysis to HHS by Jan. 29 and an initial strategy with recommendations by March 31. The first deadline was subsequently delayed until the end of March. Consistent with President Obama’s February 2015 cybersecurity information-sharing executive order, the notice said the project would support the creation of an information-sharing and analysis organization (ISAO) for the sector.

Harris County Hospital District rebranded itself Harris Health System in 2012 but still uses its original name in contracts.

CMCS Releases Community First Choice Report

On March 16, the Center for Medicaid and CHIP Services (CMCS) released the Community First Choice: Final Report to Congress. The report describes findings in four states (California, Montana, Maryland and Oregon) that had implemented the Community First Choice (CFC) benefit as of December 2014, and summarizes the status of the CFC benefit in those states as of March 15, 2015. The “Community First Choice Option” allows states to provide home- and community-based attendant services and supports to eligible Medicaid enrollees under their State Plan.

CMS Releases Interactive Mapping Medicare Disparities Tool

On March 17, the Centers for Medicare and Medicaid Services Office of Minority Health (CMS OMH) released a new interactive map to increase understanding of geographic disparities in chronic disease among Medicare beneficiaries. The Mapping Medicare Disparities (MMD) Tool identifies disparities in health outcomes, utilization and spending by race, ethnicity and geographic location. Understanding geographic differences in disparities is important to informing policy decisions and efficiently targeting populations and geographies for interventions.

Racial and ethnic minorities experience disproportionately high rates of chronic diseases and are more likely than other individuals to experience difficulty accessing a high quality of care. The identification of areas with large differences in the proportions of Medicare beneficiaries with chronic diseases is an important step for informing and planning health equity activities and initiatives. The Mapping Medicare Disparities Tool features:

A dynamic interface with data on the prevalence of 18 chronic conditions, end stage renal disease or a disability; Medicare spending, hospital and emergency department (ED) utilization, preventable hospitalizations, readmissions and mortality rates.

The ability to sort by state or county of residence, sex, age, dual-eligibility for Medicare and Medicaid, and race and ethnicity.

Built-in benchmarking features to investigate disparities within counties and across racial and ethnic groups, and within racial and ethnic groups across counties.

The MMD Tool was developed in collaboration with KPMG LLC and NORC at the University of Chicago as part of the CMS Equity Plan for Improving Quality in Medicare.The plan provides a framework for advancing health equity by improving the quality of care provided to minority and other underserved Medicare beneficiaries.

To learn more about how to use the tool and its data sources, see the MMD Tool Overview.

On March 15, the Centers for Disease Control and Prevention (CDC) released its final recommendations for opioid prescribing. According to the recommendations, non-opioid therapies are the preferred treatment for chronic pain. However, when opioids are necessary, physicians should start patients on immediate-release, not extended-release or long-acting drugs. These guidelines apply to adults with chronic pain — not to cancer patients or to palliative or end-of-life care.

The recommendations are mostly unchanged from earlier draft guidelines, despite scrutiny from other federal health agencies, drug companies and patient groups. CDC made some changes based on feedback, including the range for the lowest effective dose and duration of painkiller use.

CDC plans to work with federal partners and payers on policies to help improve implementation of the guidelines, like urine drug testing or medication-assisted treatment for opioid addiction.

HHS Follows CDC by Releasing a New Federal Strategy to Address Pain Management

On March 18, the Department of Health and Human Services released a strategy related to pain management that does not solely rely on prescription drugs. This follows the publication of final CDC guidelines to rein in primary care doctors’ use of opioid medications to treat chronic pain.

The strategy was put together by the Interagency Pain Research Coordinating Committee, which sought to block CDC’s guidelines in December because they were not integrated with the committee’s broader strategy, which includes evaluating pain management strategies to supplant opioid prescribing.

Those complaints were overpowered by federal health officials’ concern about the prescription painkiller epidemic.

The report recommends improving pain care through research, improved care for disadvantaged groups, improved service delivery and payment and better education and training of the public and professionals about pain management.

Providers and patients need access to a larger range of pain treatment options, the report says, as well as awareness of treatment options and risks. The health care workforce historically has not been well trained to treat pain.

On March 11, the U.S. Food and Drug Administration (FDA) announced it will begin expediting abbreviated new drug applications (ANDAs) for generic submissions for which there is currently only one manufacturer. This policy comes as FDA faces scrutiny for its generic drug review backlog, which lawmakers argue is contributing to rising drug prices. The change — which would speed up the review of so-called “sole-source” generic drugs — could increase competition, help drug shortages and drive down the cost of expensive generics with no competition.

FDA has already prioritized potential first generic products, submissions related to drug shortages, submissions subject to special review programs and submissions related to certain government purchasing programs, among other things.

This update follows the introduction of a Senate bill that would create a priority review voucher program rewarding companies for developing a generic with only one competing product on the market or on FDA’s drug shortage list.

State Activities

California: Aid-In-Dying Law to Take Effect June 9

Beginning June 9, terminally ill patients in California can seek life-ending drugs from their physicians. California’s medical “aid-in-dying” law was signed by Gov. Jerry Brown in October 2015. It is not slated to take effect until 90 days after lawmakers adjourn a special session on health care, during which they have also approved a new managed care tax on health insurers and voted to increase the state’s minimum smoking age to 21. California is the fifth state to allow physician-assisted suicide.

Utah: Lawmakers Extend Medicaid to State’s Poorest

Utah’s state legislature approved a measure extending Medicaid coverage to roughly 16,000 low-income adults, specifically those who are homeless, are in the criminal justice system or have substance abuse or mental health issues. This proposal comes as Medicaid expansion — which would cover more than 100,000 people — is still in question due to Republican opposition. The newest Medicaid plan will be funded under Utah’s traditional 70 percent federal matching rate — Utah’s share of costs will be $30 million and the federal government will pay $70 million. Hospitals agreed to cover $13.5 million of the expenses.

Colorado: New Report Shows Positive Impact of Medicaid Expansion

According to findings from the Colorado Health Foundation, the first two years of Medicaid expansion in Colorado added 31,074 new jobs, increased economic activity by $3.8 billion and raised annual household earnings by $643. In 20 years, Colorado is projected to add a total of 43,018 new jobs, increase economic activity by $8.5 billion and raise average annual household earnings by $1,033. Expansion alone will grow employment by 1.35 percent. Colorado uses an assessment on hospitals to cover its share of expansion costs rather than funding from the state budget.

H.B. 2681, a bill intended to get more pharmacists to prescribe birth control, is now only an educational effort. Washington state Rep. Melanie Stambaugh wanted pharmacists to sign collaborative drug therapy agreements with public health officials and to have doctors increase access to birth control. The Washington state Senate removed this language and it was not restored before the legislature adjourned March 10.

Now, the bill directs a pharmacy commission to create signage for pharmacies to display if they prescribe contraception.

Iowa: House Passes Legislation Banning Fetal Tissue Research

The Iowa state House recently passed legislation that would ban most fetal tissue research. It is unlikely, however, that the bill will advance in the Democratic-controlled Senate. The bill would ban a woman who has had an abortion from donating fetal tissue for research, but tissue donated after miscarriages or stillbirths would still be allowed.

Florida: Doctor Groups Ask AG to Block Aetna-Humana Merger

The American Medical Association and two Florida-based doctor groups asked the Florida attorney general to reject the proposed Aetna-Humana merger. This letter comes after the Florida insurance regulator approved the merger last month. Florida’s Office of Insurance Regulation said there isn’t strong evidence that competition would significantly decrease if the merger went through. The doctor groups suggest that the regulators were tricked by Aetna’s arguments that existing state and federal regulation would limit any anti-competitive consequences.

Maine: Maine Warns of Possible Co-op Failure

Maine’s Bureau of Insurance warned the Centers for Medicare and Medicaid (CMS) services in a letter that Maine Community Health Options is at risk of going insolvent. In 2014, the co-op in Maine seemed to be the strongest in the country, but it is clear now that this was not the case. Its 2015 rates turned out to be inadequate. State officials also warn that there is no way for Maine to retain the losses if the co-op becomes insolvent — the costs would be endured by providers and patients. The state insurance bureau wants to put the co-op in receivership and cancel a random selection of its plans in order to reduce costs. However, CMS told the insurance superintendent that doing so would violate federal law and possibly create a loophole that undermines the guaranteed renewability of QHPs. CMS responded that it proposed several approaches to solving Maine’s concerns, but doesn’t think it should take actions that would lead to 20,000 people losing coverage.

Regulations Open for Comment

Food and Drug Administration (FDA) Issues Final Rule to Phase Out Trans Fats

FDA issued a final rule June 16 that gives the food manufacturers three years to phase out partially hydrogenated oils (PHOs), which are still used in a wide variety of food products from microwave popcorn to cake frosting. The decision finalizes an agency determination that PHOs, the primary dietary source of artificial trans fat in processed foods, are not “generally recognized as safe” or GRAS for use in human food. Since 2006, manufacturers have been required to include trans fat content information on the Nutrition Facts label of foods. Between 2003 and 2012, the FDA estimates that consumer trans fat consumption decreased about 78 percent and that the labeling rule and industry reformulation of foods were key factors in informing healthier consumer choices and reducing trans fat in foods. Comments on the final rule are due by June 18, 2018.

More information on FDA’s decision can be found in the agency’s press release.

HHS Posts Guidance for State Innovation Waivers

On Dec. 11, the Department of Health and Human Services (HHS) posted guidance for states interested in seeking a State Innovation Waiver under Section 1332 of the Affordable Care Act (ACA). State Innovation Waivers allow states to receive federal funding to implement alternative models of health care coverage that provide affordable coverage to their residents. The notice clarifies that the minimum length of public notice and comment periods for waiver applications is 30 days.

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule entitled “Medicare Program: Expanding Uses of Medicare Data by Qualified Entities.” The rule would expand access to Medicare information by permitting certain organizations to buy and share claims data. Created under Obamacare, Medicare’s qualified entity program allows providers, employers and others access to Medicare data to analyze the performance of providers and suppliers. The rule aims to help qualified entities make business decisions that reduce costs and improve quality of care. These changes were mandated in the Medicare Access and CHIP Reauthorization Act and CMS thinks the expansion of data sharing will stir more interest in the program. If the proposal is finalized, CMS estimates the number of qualified entities will go from 13 to 20. Comments will be accepted on the proposed rule until 5 p.m. on March 29, 2016.

CMS Releases Proposed Rule for Provider Enrollment Process

On Feb. 25, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule to implement additional provider enrollment provisions of the Affordable Care Act (ACA) to help make sure that entities and individuals who pose risks to the Medicare program are kept out of it or removed for extended periods. This rule is part of CMS’s effort to prevent questionable providers and suppliers from entering the Medicare program.

If finalized, the regulations would allow CMS to remove or prevent enrollment of those who try to circumvent enrollment requirements through name and identity changes or through inter-provider relationships. It will also address vulnerabilities such as when providers and suppliers avoid paying their Medicare debts by reenrolling as a different entity.

Major provisions of the proposed rule include:

Disclosure of Affiliations: Would require health care providers and suppliers to report affiliations with entities and individuals that: (1) currently have uncollected debt to Medicare, Medicaid or CHIP; (2) have been or are subject to a payment suspension under a federal health care program or subject to an Office of Inspector General (OIG) exclusion; or (3) have had their Medicare, Medicaid or CHIP enrollment denied or revoked. CMS could deny or revoke the provider’s or supplier’s Medicare, Medicaid or CHIP enrollment if CMS determines that the affiliation poses an undue risk of fraud, waste or abuse.

Different Name, Numerical Identifier or Business Identity: CMS could deny or revoke a provider’s or supplier’s Medicare enrollment if CMS determines that the provider or supplier is currently revoked under a different name, numerical identifier or business identity.

Abusive Ordering/Certifying: Would allow CMS to revoke a physician’s or eligible professional’s Medicare enrollment if he or she has a pattern or practice of ordering, certifying, referring or prescribing Medicare Part A or B services, items or drugs that is abusive, represents a threat to the health and safety of Medicare beneficiaries or otherwise fails to meet Medicare requirements.

Increasing Medicare Program Re-enrollment Bars: Would improve protection of the Medicare Trust Funds and program beneficiaries by: 1) raising the existing maximum re-enrollment bar from three years to 10 years; 2) allowing CMS to add three more years to the provider’s or supplier’s re-enrollment bar if the provider attempts to re-enroll in Medicare under a different name, numerical identifier or business identity; and 3) imposing a maximum 20-year re-enrollment bar if the provider or supplier is being revoked from Medicare for the second time.

Other Public Program Termination: Would permit CMS to deny or revoke a provider’s or supplier’s Medicare enrollment if: (1) the provider or supplier is currently terminated from participation in a particular Medicaid program or any other federal health care program under any of its current or former names, numerical identifiers or business identities; or (2) the provider’s or supplier’s license is revoked in a state other than that in which the provider or supplier is enrolled or enrolling.

Expansion of Ordering/Certifying Requirements: Would permit CMS to require that physicians and eligible professionals who order, certify, refer or prescribe any Part A or B service, item or drug must be enrolled in or validly opted out of Medicare.

Comments on the proposed rule must be submitted no later than 5 p.m. on April 25.

ONC Releases Proposed Rule Expanding Role in Health IT Certification Program

The Office of the National Coordinator for Health Information Technology (ONC) released a proposed rule that would enable the agency to conduct direct reviews of certified health IT products. Such direct review would also include how certified health IT interacts with other systems. The rule increases ONC’s oversight of health IT testing bodies to improve alignment and more successfully deal with issues, and seeks to increase transparency associated with the surveillance — it plans to make results of surveillance of electronic health records (EHRs) publicly available. The reviews would focus on situations posing health or safety risks. Depending on the findings, the office says it may require corrective action or suspend or terminate certification for an EHR or health IT module.

ONC hopes this move will enhance public confidence in health IT testing and certification. The U.S. Department of Health and Human Services (HHS) said the rule will empower consumers by improving availability of certification information. ONC is proposing a “strict process” for health IT recertification or replacement versions, and a program ban for those that don’t fix problems pointed out by ONC. Comments on the rule will be accepted through May 2.

On March 8, the Centers for Medicare and Medicaid Services (CMS) announced a proposed rule to test new models to improve how Medicare Part B pays for prescription drugs and supports physicians and other clinicians in delivering higher-quality care. Medicare Part B covers prescription drugs that are administered in a physician’s office or hospital outpatient department, such as cancer medications, injectables like antibiotics, or eye care treatments. The proposed Medicare Part B Model would test new ways to support physicians and other clinicians as they choose the drug that is right for their patients. The proposed rule is designed to test different physician and patient incentives to do two things: drive the prescribing of the most effective drugs and test new payment approaches to reward positive patient outcomes. Among the approaches to be tested are the elimination of certain incentives that work against the selection of high-performing drugs, as well as the creation of positive incentives for the selection of high-performing drugs, including reducing or eliminating patient cost sharing to improve patients’ access and appropriate use of effective drugs.

Prescription drug spending in the U.S. was around $457 billion in 2015, or 16.7 percent of overall health spending. In 2015, Medicare Part B spent $20 billion on outpatient drugs administered by physicians and hospital outpatient departments. The proposed rule seeks comments on testing six different alternative approaches for Part B drugs to improve outcomes and align incentives to improve quality of care and spend dollars wisely:

The Agency for Healthcare Research and Quality’s (AHRQ) Technology Assessment Program posted a draft technical brief for review on March 11. The draft is entitled “Renal Denervation in the Medicare Population.” The document will be available for review from 9 a.m. on March 11 to 5 p.m. on April 1.

According to an analysis from the Committee for a Responsible Federal Budget, Republican presidential candidate Donald Trump’s plan to repeal and replace Obamacare would result in 21 million people losing their insurance coverage and cost nearly $500 billion over 10 years. Trump’s plan would cover 1.1 million individuals, as opposed to the 22 million insured by the Affordable Care Act (ACA).

On March 14, the U.S. Department of Health and Human Services (HHS) released a report showing that the share of people lifted out of poverty every year due to government safety net programs has increased tenfold since the War on Poverty began in 1964. Nearly 40 million people were lifted out of poverty in 2012, with the federal government spending $620 billion on safety net programs, including $283 billion for health programs for low-income individuals. HHS notes that certain populations still face higher levels of poverty, including African Americans, single-mother homes, Latinos and people with the lowest educational levels.

A new report from Oliver Wyman estimates that a new round of payment cuts to Medicare Advantage will undermine disease management and care coordination programs that keep seniors healthy. Also, beneficiaries enrolled in employer-sponsored plans could face higher costs and new benefits in 2017. According to the report, the cuts would result in an estimated 0.5 to 3.9 percent cut on average to Medicare Advantage payments in 2017. America’s Health Insurance Plans (AHIP) came out against these cuts, saying Medicare Advantage is delivering high-quality care for millions of seniors.

Pew Charitable Trusts Study Makes Recommendations on Drug Compounding

A recent Pew Charitable Trusts study researched states’ regulations for drug compounding and identified how to improve oversight gaps to ensure better standards and outcomes for patients. The study identified three problem areas in drug compounding practices: 1) only half of the states have fully adopted the best practice quality standard for compounding sterile drugs set by the U.S. Pharmacopeial Convention; 2) a little over half the states track the number of pharmacies that perform sterile compounding; and 3) over half of the states allow traditional pharmacies to compound supplies of drugs without a specific patient prescription. Pew then made four recommendations for how the practices could become safer: states should 1) apply the U.S. Pharmacopeial Convention’s quality standards; 2) conduct annual inspections; 3) have mechanisms to track compounding activity; and 4) align with federal law their policies on compounding drug supplies without a prescription.

The findings come as the U.S. Food and Drug Administration (FDA) seeks more funding to improve oversight of compounding through increased inspection and enforcement activities, policy development and implementation, and state collaboration and coordination. The president’s budget requests a $1 million funding increase for the FDA compounding program.

MACPAC Releases March 2016 Report to Congress on Medicaid and CHIP

In its March 2016 Report to Congress on Medicaid and CHIP, MACPAC recommended that HHS bolster data collection to more accurately target funds to hospitals with more low-income patients and higher uncompensated care. “HHS should collect and report hospital-specific data on all types of Medicaid payments for hospitals,” MACPAC said in the report. In a different analysis, MACPAC found that exchange plans in the Affordable Care Act (ACA) in 36 states had fewer protections against high out-of-pocket costs compared to CHIP.

On March 16, the Centers for Medicare and Medicaid Services (CMS) announced findings from the second annual evaluation report for the Strong Start for Mothers and Newborns Strategy II Initiative. Strong Start Strategy II seeks to build on work conducted by the Partnership for Patients and Strong Start Strategy I to improve newborn health through a reduction in early elective deliveries. Babies are generally healthier and have better long-range outcomes when they are born full term. Strategy I contributed to a 64.5 percent nationwide drop in early elective deliveries from 2010 to 2013.

The Strong Start II builds on this progress through prenatal care enhancements addressing the psychosocial needs of pregnant women eligible for Medicaid and CHIP.

Research shows that infants born preterm (before 37 completed weeks of gestation) have higher mortality risks and may endure a lifetime of developmental and health problems when compared to their counterparts born after 37 weeks’ gestation. Prenatal care enhancements provided through Strong Start are designed to promote overall maternal and infant health and particularly to reduce incidence of preterm birth and low birth weight. The second annual report presents the progress Strategy II has made since its inception.

Strong Start has continued its partnership with 27 organizations representing nearly 200 provider sites in 32 states, Washington, D.C., and Puerto Rico. The program provides enhanced services through three approaches:

Group Care – Group prenatal care that incorporates peer-to-peer support in a facilitated setting for three components: health assessment, education and support.

Enrollment increased in the second year of program operations, with a total of 23,000 women enrolled from March 2013 to the end of the first calendar quarter of 2015. Enrollment is expected to continue to grow to more than 40,000 participants by the program’s end in February 2017.

Vaginal birth after cesarean rates that are nearly twice the national average

Commonwealth Fund Releases Report on Cost-Sharing

A new report from the Commonwealth Fund confirms that the Affordable Care Act’s (ACA) cost-sharing reductions helped lower exchange shopper’s health costs. The effects vary widely by market however. The study offers a hypothetical consumer to show how cost-sharing reductions would reduce the median out-of-pocket costs for a 40-year-old man. A high user of care would have $6,500 out-of-pocket costs. This would be $4,949 for someone earning $25,000, $1,850 for someone earning $20,000 and $650 for someone earning $17,000.

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